Income inequality and convergence in Central Java under regional autonomy

Daryono Soebagyo, Mohd Fahmy-Abdullah, Lai Wei Sieng, Jihad Lukis Panjawa

Research output: Contribution to journalArticle

Abstract

Development cannot be assessed merely based on the economic growth rate, but it entails the aspects of equitable development. Regional inequality becomes a universal problem. The approach that emphasizes macroeconomic growth is inclined to neglect the noticeable gap in inter-regional development. Indonesia had been under a centralized national government for more than three decades. New policy of regional autonomy was then implemented in 2001. The enactment of the Regional Autonomy as adopted from Law No. 21/1999 with the latest revision of Law No. 23/2014 is perceived as an effort to address inequality and injustice between regional developments. This study aims at analyzing regional income inequality and convergence in Central Java under regional autonomy and identifying regencies which are left behind. The analytical tools were Williamson Index, β Absolute Convergence and Klassen Typology. The findings reveal that inter-regional income inequality in Central Java in the period 2000-2004 was high, but it declined in the period 2005-2014. This condition demonstrates the fulfillment of Kuznet's inverted U-hypothesis. Income inequality between regions in Central Java was relatively high and absolute convergence did not occur during the regional autonomy era. The authority need to focus on development in underdeveloped regions to reduce the inequality.

Original languageEnglish
Pages (from-to)203-215
Number of pages13
JournalInternational Journal of Economics and Management
Volume13
Issue number1
Publication statusPublished - 1 Jun 2019

Fingerprint

Java
Income convergence
Income inequality
Autonomy
Regional development
Enactment
Authority
Kuznets
Macroeconomics
Regional inequality
Indonesia
Inverted-U
Neglect
Economic growth
Government

Keywords

  • Convergence
  • Economic growth
  • Regional inequality

ASJC Scopus subject areas

  • Business and International Management
  • Economics, Econometrics and Finance(all)
  • Strategy and Management

Cite this

Income inequality and convergence in Central Java under regional autonomy. / Soebagyo, Daryono; Fahmy-Abdullah, Mohd; Wei Sieng, Lai; Panjawa, Jihad Lukis.

In: International Journal of Economics and Management, Vol. 13, No. 1, 01.06.2019, p. 203-215.

Research output: Contribution to journalArticle

Soebagyo, Daryono ; Fahmy-Abdullah, Mohd ; Wei Sieng, Lai ; Panjawa, Jihad Lukis. / Income inequality and convergence in Central Java under regional autonomy. In: International Journal of Economics and Management. 2019 ; Vol. 13, No. 1. pp. 203-215.
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